Last week we explained why while endless promises may be enough to confuse the market and force endless rounds of short covering as weak hands are flushed out of positions  under threat (but never action) of Fed intervention, banks are no longer in...

 

The Fed is in "Do as I say not as I do" mode, telling the markets they won't start a new round of QE but are expanding the money supply anyways.  While everyone is focused on 'to QE or not to QE" the truth is as ZH implies, the banks have levered up as far as they can go having mobilized just over $200 billion of excess reserves. 

 

This is just the beginning of the next wave of printing and the headlines will be silent now that both Bernanke an Draghi have talked the markets down from the ledge last week. 

 

Expect a run to around 1450 on the S&P and gold to break through $1650.